A U.S. federal judge on Monday ordered Paramount and Warner Bros Discovery to halt their $81 billion merger for at least two weeks, giving several U.S. states time to have their lawsuit against the deal heard in court.

Twelve U.S. states led by California filed a lawsuit last week to block Paramount's acquisition of Warner Bros, arguing that the new entity created by the deal would "eliminate competition" in Hollywood and reduce choices for customers, especially moviegoers and buyers of cable television networks across the United States.

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State attorneys general called on the two companies not to complete the deal pending a final court ruling on the states' lawsuit. When the companies rejected the request, the states turned to the court to obtain a temporary injunction.

Judge Arcelli Martinez issued the temporary halt order on Monday, opening the door for a preliminary injunction to effectively block the deal, as the states seek.

California Attorney General Rob Bonta said in a statement after the order, "This is an important first victory in our case to prevent this merger from coming to light... History tells us what happens when a few people hold too much power in markets vital to Americans' lives: opportunities shrink for many, and the quality of services and products deteriorates for everyone."

It is noted that the Warner-Paramount merger would create a single new entity combining two of the top five Hollywood film production companies, along with numerous television networks, news platforms, and digital streaming services such as HBO Max owned by Warner, CNN news channel owned by Warner, and its competitor CBS owned by Paramount.

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Paramount has not yet commented on the court ruling, but the company, acquired by Skydance last year, vowed to "vigorously defend" the acquisition of Warner.

Paramount previously described the states' lawsuit as "wrong on both the facts and the law," arguing that the merger would increase competition against larger entities in the U.S. entertainment industry. It also pointed to the official approvals it received, including approval from the administration of U.S. President Donald Trump.

The temporary halt order issued by the federal judge on Monday suspends the deal for at least 14 days, with the possibility of extending the suspension to up to 28 days. The court set August 3 for a hearing on the states' request for a preliminary injunction to block the deal, though that date could also be postponed.